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TMI Blog2021 (3) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee company and that there; was merely an expansion of the existing unit?" 2. " Whether on the facts and in the circumstances of the case, the Learned CIT(A) was justified in allowing deduction u/s.80IB(4) without appreciating the fact that there was no separate identity of the so called new unit since there was no separate workforce distinct labours ? No registration of excrise or VAT, No material procurement, storage or other factors necessary for independent existence of the separateunit?" 3. "Whether on the facts and in the facts and circumstances of the case, the learned CIT(A) was justified in allowing deduction u/s. 80IB(4) without appreciating the fact that the ADIT (Inv.), Jammu, confirmed that there existed only one unit, which has been confirmed in the statement on oath recorded of Shri Sanjeev Uppal, Works Manager of the assessee-company?" 4. "Whether on the facts and in the circumstances of the case, the Learned CIT(A) was justified in allowing deduction u/s.80IB(4) without appreciating the fact that the provisions of section 80IB restricts the deduction for new unit or industrial undertaking in contrast to the provisions of section 80IC, which allowed ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Brabrnna, Jammu. 3) There is only one unit that is functioning. 4) Only one set of accounts are maintained. 5) No independent and separate accounts for Unit-1 and Unit-II are maintained as contended by the assessee vide its submission dated 26.12.2011. 6) VAT and Central Excise returns filed only in the name of M/s. Eurobond Industries P. Ltd. 7) Both the units, are produces same products and similar raw material are used. 8) There is only one attendance register is maintained. 9) All the purchases and sales are affected in the name of M/s. Eurobond Industries P. Ltd. On the basis of above facts and findings by ADIT(Inv.),Jammu the Industrial Undertaking unit-II is not self sufficient and independent and does not have its own existence. It is mere installation of additional machinery, which in itself does not suffice to call as "undertaking" which is lacking any of its independent identification number viz, PAN number, excise registration number, P.P. registration number etc. Further to substantiate his findings, ADIT (Inv.),Jammu has recorded the statement of Shri Sandeep Uppal, Works Manager who in his statement given on oath u/s 131 of the IT Act in wherein he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Unit-1 shall be entitled for deduction u/s 80IB for the entire profit earned by both unit. And under this alternative situation also there will be no change in the taxable income of the company under the normal provisions of the I.T.Act. The company shall be liable for income tax on book profits u/s 115J8 of the I.T.Act, 1961." 8. However he rejected the same by holding as under :- 7.1 The plea of the assessee is not acceptable as assessee itself certified the independent, existence of Unit-II as 'Industrial Undertaking'. Further, he has maintained the same stand through out the assessment proceedings. Even in its reply to show cause and comments on report of ADIT, Jammu, it does not give any justification or reasoning for a new line being an 'Industrial Undertaking'. Assessee has resorted to this alternate plea as his actual plan to unduly claim of deduction u/s. 80IB(4) for Unit-II has been questioned. .Assessee-during the course of assessment proceedings have submitted summary of deduction u/s. 80IB Claimed by Unit-I and Unit-II over the years which are reproduced as under:- Eurobond Industries P. Ltd. Summary of 80IB claimed from 1.4.2005 to 31.3.2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch of UCO Bank had sanctioned a term loan of Rs. 9.00 crores for the expansion of the existing ACP project at Jammu on 31st January 2008. According to the Schedule of Fixed Assets of Unit-II (which was part of the audited balance sheet as on 31sl March 2009), there was an addition to the gross block of plant & machinery of Rs. 4,70,76,184/- accompanied by an addition to the gross block of electrical installation of Rs. 18,93,735/- both totalling over Rs. 4.89 crores. On 20th October 2008, the Power Development Department of Government of Jammu and Kashmir had accorded sanction for an additional 620 KW over and above 600.4 KW already sanctioned (for Unit-l), thus leading to a total load factor or 1220.4 KW. Coming to the statistics of production, while Unit-I had produced 6,09,671 square metres of ACP during FY 2008-09, after commencing production mid-year Unit-II had produced 4,41,128 square metres of ACP during the same financial year. The installed capacity on the other hand was 7,95,000 square metres and 10,95,000 square-metres of ACP for Unit-I and Unit-II respectively. While disregarding this wealth of data and documentation the AO appears to have concentrated on the apparent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4) . This was the last year of the claim of deduction under section 80IB for that unit. In the current year assessee claimed that it has established another unit named unit-II, and claimed deduction under section 80IB(4) for both the units. 16. The assessing officer found that assessee had only done substantial increase in the capacity of its existing unit and was trying to pass it off as establishment of a second unit. In this regard assessing officer also obtained report from the additional director investigation. The said report duly provided that there was only one unit which was also corroborated by the examination of ADI from the assessee's work's manager. 17. From the assessee's submissions the assessing officer noted that :- 1) it does , not have its own identity in the form of PAN and various registrations, 2) does not have its own employees and management as evident from form No. 16(1) issued to its employees. 3) No separate books of accounts etc, as confirmed by its Works Manager in his statement recorded under oath. 4) Does not have own supply of raw material 5) Does not have Stock Register In these circumstances the assessing officer found the assessee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt the decision of honourable Supreme Court referred above. 21. In the result is appeal by the revenue stands allowed for statistical purposes Assessee Cross Objection 22. The ground raised in the cross objection read as under :- "The learned Commissioner of Income Tax (Appeals)-19, Mumbai ("the CIT(A)") erred in fact and in law in rejecting the alternative claim of the Appellant that in case deduction u/s. 80IB is not allowed on the new unit in that case also deduction u/s. 801B is available as the existing unit of the Appellant is eligible for deduction u/s. 80IB." 23. Since we have already remanded the matter to the file of learned CIT(A) in Revenue's appeal above and directed him to consider all the grounds raised by the assessee afresh, this cross objection has becomes statistical. Hence the cross objection is allowed for statistical purposes. Assessee's appeal ITA No. 4071/Mum/2016 for assessment year 2010-11 :- 24. For A.Y. 2010-11, the learned CIT(A) has rejected the assessee's claim for deduction under section 80IB for the same unit as above. Assessee is aggrieved by that. Revenue's appeal in ITA No. 1471/Mum/2016 for A.Y. 2012-13:- 25. For assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X
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